3 Scams That Could Cost Homeowners Big Money This Spring
Written by
Dawn Allcot
Edited by
Nicholas Morine
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Spring is in the air. That could mean buying or selling a home or just sprucing up your surroundings. The National Association of Realtors reported that springtime typically sparks increased interest in home buying and increased sales. This year, though, the housing market started heating up as early as January, according to Realtor.com, in part due to relatively low mortgage interest rates.
But be aware: Increased activity in home sales, home improvement projects and even spring cleaning sparks the attention of scammers.
“Amidst the busy homebuying and selling season, there is an increased opportunity for bad actors to take advantage of consumers’ hard-earned money and personal information,” Darius Kingsley, head of consumer banking practices at Chase, told GOBankingRates in an email interview.
Understanding common spring scams can help you avoid bad actors and hasty decisions, so you can protect your money.
Protect Your Funds During Your Home Closing
If you’re buying a home, you probably have substantial savings set aside for your down payment and closing costs. You know, at some point, you will have to part with that hard-earned money. But be careful before sending a wire transfer, Kingsley warned.
“Be cautious of fake wire transfer requests via email or text claiming your mortgage lender or realtor needs more money than initially asked for,” he said. “If you are closing on a home, be very cautious and confirm payment instructions directly with your agent or loan officer through a known phone number to verify wire instructions before you send any money.”
He noted that scammers often impersonate mortgage lenders, banks and even government entities. It’s difficult to cancel or reverse a wire transfer once it’s been initiated. The scammers often transfer the money to another account before you realize you made a mistake sending money.
Closing on a home can be stressful, but don’t let high-pressure tactics get to you.
“Don’t be fooled into a false sense of urgency. Scammers will attempt to manipulate you emotionally and financially to get access to your information and money. If it sounds scary, urgent, and imminent, stop to think, take a pause before you respond,” Kingsley said.
Stay in communication with your lender throughout the process so you can avoid surprise requests for money. You should be aware of funds due at closing and the accepted method of payment. Usually, lenders accept payment via a certified check or a wire transfer. A certified check may be more secure, but slower. If you opt to use a wire transfer, initiate the transfer in person with the closing agent by your side, if possible, to ensure you do it correctly.
Be Wary of Home Warranty Solicitations
Whether you’re buying a new home or have been living in your house for years, a home warranty can be a worthwhile investment, according to experts.
According to BobVila.com, “[A] good home warranty from a trusted company can protect against unanticipated costs by acting as a service contract that covers these major home systems and appliances.”
However, scammers use the popularity of home warranties to set up fake companies and get people to pay for a home warranty that doesn’t exist.
“Be aware of fake letters or emails claiming your property’s home warranty may be expiring or has already expired,” Kingsley said. While most people know that solicitations to extend your vehicle’s service warranty are scams, thieves are now moving on to target home warranty services.
If you’re looking to invest in a home warranty, read legitimate company reviews on websites like Consumer Reports. You can also ask for recommendations from friends, family, or your real estate agent.
“If you want to be sure you’re talking to a legitimate representative of the company that contacted you, call the number on their official website,” Kingsley advised.
Don’t Get Scammed By Home Cleaning or Lawn Services
Sadly, scammers are using real company names to sell fake home cleaning or lawn services. This hurts small businesses and the homeowners they serve. Fortunately, you can avoid this scam with a little bit of knowledge and research, according to Kingsley.
“Be wary of fake ads on social media offering in-home cleaning or landscaping services. You’ll try to check out, but the only option is to use a digital payment platform, like Zelle,” Kingsley said. “When it’s time for the cleaning service to begin, they never show up.”
If you see an ad online for a home cleaning service or landscaper in your area, do your research first. “Look up the service company online by searching for their names along with terms like ‘scam,’ ‘complaints’ or ‘reviews,'” Kingsley suggested.
Also, never pay for any goods or services through Zelle. This peer-to-peer payment platform is designed for payments to family and friends, only, and there is no way to reverse or stop a payment once you’ve initiated it.
Also, Kingsley said, “Only pay once the service has been provided.”
If you’re using a service like Taskrabbit or another platform to find a house cleaner, landscaper, handyman or other service provider, don’t take the conversation off the platform, Kingsley said. “Keep all communication contained within the booking site or app, so you have a full record, and the booking company can help if needed. Always book with a credit card in case a dispute arises,” he added.
Bottom Line
Careful research can help you avoid scams as you spruce up your home or buy or sell property this spring. Keep careful records of all transactions and use credit cards for an added layer of protection.
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